Is Beaumont a backwater town?

By Dan Wallach |
August 27, 2013
| Updated: August 27, 2013 6:17pm

In 1980, Beaumont's population was growing. The city was home to corporate headquarters, government operations and locally owned banks. It was the base of major political power and, according to Money magazine, the best place in the United States to get a job.

More than 30 years later, Beaumont and Southeast Texas might not have dropped entirely out of the race for wealth, power and success, but they have certainly been lapped. Money magazine didn't include us in its 2010 Top 100 places to live.

Much of the area's corporate, banking and government presence is gone - often to Houston - with satellites, kiosks and empty office space left in its place. Most of the area's elected representatives don't live here, thanks to redistricting efforts that gave more power to population-dense Houston. After years of declining population, in 2010 Beaumont finally pulled even with 1980, while the state of Texas grew by almost 77 percent in those 30 years to more than 25 million people.

Is Beaumont now a backwater in what has become a rushing Texas river of power amid huge population gains fed by renewed oil and gas wealth, technology, medicine and higher education? Will it ever matter again?

Pat Parsons, whose CommunityBank of Texas is about the last local institution capable of acquiring banks in Houston instead of the other way around, doesn't see a coherent center of power locally.

"There was always a core group of people in business, religion who could always work together to do what was best," said Parsons, chairman and chief executive of the Beaumont-headquartered bank. "Nobody got everything, but the community got what it needed. It just doesn't exist anymore."

There once was a towering figure in John Gray, who led Lamar University and later forged a career in banking that powered business in Beaumont.

Does Beaumont - and by extension Southeast Texas - have influence on the state and nation?

"We used to have, unquestionably," Parsons said. "There's nothing on the horizon to turn us around. I don't know anyone who has a coherent answer for that."

Location, location, location

The place itself - merely its leaders - could offer the best prospect for a turnaround. As the real estate folks like to say, the best sales argument is location, and the Texas Gulf Coast has it.

Carl R. Griffith, former Jefferson County Judge and former sheriff and now an industry consultant, sees promise for the area because of shale gas and oil and the infrastructure that exists here.

"We're on the brink of the opportunity to land some of the largest projects we've ever had," he said.

Some of the projects that Griffith worked on while he led Commissioners Court - $23 billion worth, by his count - have wrapped up, including the Motiva Port Arthur refinery expansion.

The state is working through its regulatory requirements from the Obama administration, and industry is acclimating.

Griffith said his business is to help major industries with site selection. He predicts that the Gulf Coast, from Pascagoula, Miss., to Brownsville will receive $160 billion in investment over the course of the next five or six years and will need 1.7 million more trained workers than are currently available.

Griffith said he doesn't think there is a leadership vacuum. Elected officials have made real progress on issues that will help Southeast Texas, he said.

For example, state Sen. Tommy Williams, R-The Woodlands, passed a bill whose House sponsor was state Rep. Joe Deshotel, D-Beaumont, that creates access to state bonding authority to help pay for the local share of improvements to the Sabine-Neches Ship Channel deepening project.

It's been 50 years since the channel was deepened, back when the late Jack Brooks wielded power in Congress. Brooks served from 1952 to 1994 and secured several huge projects that still benefit the region, including the Sam Rayburn Reservoir and the Port Arthur seawall, which prevented devastating flooding after Hurricane Ike in 2008.

Griffith also credited Nederland-based state Rep. Allan Ritter with crafting a constitutional amendment that will allow Texas to tap its Rainy Day fund to provide revolving loans to build water projects around the state, which also will help to protect the water in Rayburn for local needs.

"I don't believe we've gone backward in leadership," Griffith said.

But there are other drags on the area's momentum. Beaumont's local problem child - its dysfunctional school district, as described by a state audit - could delay recovery.

Branick has noted publicly that school district problems have caused at least one company to pass on expanding into Beaumont.

The company, he said, already exists in Jefferson County - he declined to identify it - but it was considering opening a Beaumont office with 38 engineers. Because of BISD's issues, it decided against it, saying its employees would have needed more money than it could afford to be able to send their children to private school.

Rich, Branick and Griffith all said they realize that local powers who carried outsized influence at the state and national level have left the stage.

In their place, Rich said, are coalitions that people have built.

He said he recently visited 24 members of Congress looking for their support on the ship channel deepening project, which will be in a new federal water projects bill that likely will come up for a vote in September.

"We'll never have a Jack Brooks or a (state Sen.) Carl Parker again," Rich said, "One guy by himself - those days are over."

He said economist M. Ray Perryman will make a presentation in Beaumont on Wednesday that shows the economic impact of a deeper waterway on the national economy. That includes refinery expansions such as Motiva, now the largest in the United States, and plans to convert liquefied natural gas terminals for export because of the abundance of shale gas development.

Griffith said shale gas is changing lives on the Gulf Coast and in the United States.

"LNG is a piece of it, but cheap natural gas drives the chemical business. And we can land a lot of projects here. Low-cost gas is long-term opportunity," he said.

Business obstacles remain

In the 1980s, major refineries drastically cut their work forces. Those workers didn't return, even after billions of dollars of investment in modernizing plants.

Chuck Kalkbrenner, incoming Beaumont chamber of commerce chairman, said the manufacturing side of petrochemicals is more automated and offers fewer opportunities for employment, unlike the exploration side, which is booming now.

Kalkbrenner is regional manager for external affairs with AT&T.

Another industry, such as technology, remains elusive, he said, but Lamar University is working on it.

For local industrial contractors, however, the lack of local decision-making at refineries makes it hard to do business.

Chuck Mason, president of Mason Construction, which has long experience in serving the area's petrochemical industries, said it's not just banks whose leadership isn't local. It's the refineries, too.

"It's difficult for us to build up relationships with the people who are making the decisions," he said.

That's because they aren't here.

"It's going on everywhere, not just here," he said. "In the last 15 or 20 years, it's changed radically. In the late 1980s, we still had local bank presidents with real authority. It used to be that (a contractor) could get his money from a refinery in 30 days. Now, it's six to eight months. You've got to be able to finance that (a business' operations). How can a small contractor survive that? It's an incredible difference."